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Solicitable class of corporation

A corporation or its SSF may solicit its restricted class at any time. The restricted class of a corporation consists of:

  • The corporation’s executive and administrative personnel;
  • The stockholders; and
  • The families (immediate household residents) of those two groups.

An SSF may also solicit, at any time, the members of the restricted class of any parent, subsidiary, branch, division or affiliate of the connected organization.

Executive and administrative personnel

Executive and administrative personnel include employees who are paid on a salary (rather than hourly) basis and who have policymaking, managerial, professional or supervisory responsibilities. The restricted class generally includes individuals who:

  • Devote the majority of their work week to executive or administrative duties involved in running the corporation’s business (for example, plant, division and section managers, officers and executives); or
  • Follow the recognized professions, such as lawyers, physicians, nurses and engineers.

The following groups might also qualify as solicitable personnel:

Consultants and commissioned employees, if they have policymaking, managerial or supervisory responsibilities and if the organization deducts federal income tax from their paychecks under the Internal Revenue Code.

Members of a board of directors who are not shareholders or employees, but who receive regular compensation.

Executive and administrative personnel of franchisees, licensees and agents. See advisory opinions (AOs) 1992-07 (H&R Block), 1990-22 (Blue Cross/Blue Shield), 1988-46 (Collins Foods) and 1985-31 (CIGNA PAC).

Executive and administrative personnel of a partnership or LLC controlled by, or controlling, a corporation or its dominant shareholders. See AOs 2004-32 (Spirit), 2001-18 (BellSouth) and 1989-08 (Wagner and Brown).

Corporate managers that exercise the type of managerial discretion and independent judgment as executive and administrative employees.

None of the individuals listed are automatically solicitable. SSFs should consult the cited advisory opinions and, if appropriate, request an advisory opinion addressing their relationship with the particular individuals they wish to solicit. See the advisory opinion process for information on how to request an advisory opinion.

Also, consult the Fair Labor Standards Act and the regulations issued pursuant to that Act for guidelines regarding whether individuals have policymaking, managerial, professional or supervisory responsibilities.


In order to be considered a solicitable stockholder, a person must have:

  • A vested beneficial interest in the stock;
  • The power to direct how the stock will be voted, if it is voting stock; and
  • The right to receive dividends.

Employee stockholders

Individuals who participate in an employee stock ownership plan (ESOP) are solicitable as stockholders, as long as they have the rights listed in the previous paragraph.

In cases where participants’ dividends are automatically reinvested under the ESOP, participants are solicitable only if they actually withdraw stock or have the right to withdraw at least one share of stock without a suspension of rights or penalty.

Who is not included

  • Professional employees represented by a labor organization.
  • Lawyers, consultants and other personnel employed by firms retained by the corporation and who are not employees of the corporation.
  • Members of the board of directors who are not also executive or administrative personnel and who receive no compensation.
  • Salaried foremen and others who supervise hourly employees.
  • Former or retired personnel.

Exception: If any of the persons mentioned are stockholders or family members of stockholders, then they would be included in the restricted class.

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